===== SIDA 1 ===== Interim Report 1, 2023 › SALES totalled SEK 11,646 million (8,749) million › PROFIT AFTER NET FINANCIAL ITEMS amounted to SEK 1,654 (906) million › PROFIT AFTER TAX was SEK 1,274 (680) million › EARNINGS per share before and after dilution, based on the average number of shares outstanding during the period, were SEK 0.63 (SEK 0.33) › ACQUISITION OF-65% of the shares in the Canadian stove company Miles Industries Ltd (2023) ===== SIDA 2 ===== 2 NIBE · INTERIM REPORT 1, 2023 CEO Gerteric Lindquist’s report Strong start to the year Continued strong demand and clear improvement in supply chain situation. In the first three months of the year, the Group’s sales grew by 33.1% (28.1%), of which 27.8% (26.8%) was organic growth. The weak Swedish krona had a positive effect on sales growth, as did the price increases introduced in the past 12 months. In real terms, organic growth was well above the target of 10%, however. When comparing the first quarter of 2023 with the corresponding period in the previous year, it is necessary to bear in mind that, relatively strong growth notwithstanding, the first quarter of 2022 was charact - erized by our sub -suppliers’ inability to supply requested quantities while at the same time implementing frequent, as well as steep, price increases. The continued strong growth in demand is primarily due to the tran- sition to a more sustainable society and volatile energy prices. With re- gard to the difficulties relating to materials and components supply, our sub-suppliers have for several quarters worked purposefully to adapt to the much higher level of demand, and we are delighted to see a signifi- cant improvement in both supply chain capacity and supply chain se- curity. Unfortunately, this generally positive development has been marred by the fact that a few strategic suppliers are still lagging behind in their efforts to increase capacity. This means our supply chain prob- lems continued in the quarter just ended. We expect to be able to grad- ually return to a more normal supply chain situation from the st art of the second half of the year. The business area NIBE Climate Solutions continued to report very strong growth in all targeted markets in Europe and the market is also taking off in North America. To be able to achieve acceptable delivery performance, significant efforts have been made to safeguard our sub- suppliers’ delivery capacity both in the short term and from a long-term perspective. We are delighted that we are now starting to see the ef- fects of these painstaking efforts, although we are relu ctant to predict a return to a more normal supply chain situation until the second half of the year. Alongside this work, we are also implementing a very ambi- tious investment programme to ensure that we are always at the fore- front in terms of our development capacity, our production capacity and our market presence. The growth in sales enabled us to post a sharp increase in operating profit. The gradual improvement in delivery capacity among our sub - suppliers has also boosted our productivity as it has enabled production to run more smoothly. Altogether, this resulted in a sharp improvement in operating margin. However, this should be viewed against the back- ground that operating profit in 2022 was burdened by write -downs of SEK 114 million in respect of our Russian operations. The business area NIBE Stoves also recorded continued strong growth, particularly in the wood -fired products category in Europe. As before, the supply chain situation remained challenging, due to a con- tinued shortage of a few, absolu tely crucial, input goods. In this busi- ness area too, supply chain capacity is not expected to return to some- thing akin to normal until later this year. Our own production capacity is gradually being expanded as a result of an ambitious investment programme that also includes large invest- ments in automation and robotics. Our major focus on development of products with lower particle emissions is starting to bear fruit and we have begun introducing this product concept. The strong growth in sales also boosted operating profits and com- bined with better price balance and good cost control, the operating margin also improved. Calendar May 16, 2023 08.00 (CEST) Interim Report 1, January – March 2023 11.00 (CEST) Teleconference (in English): Presentation of Interim Report 1, 2023 and opportunity to ask questions. Registration on our website www.nibe.com is required in order to access the presentation images and to obtain a code to be able to ask questions. 17.00 (CEST) Annual General Meeting August 17, 2023 Interim Report 2, January – June 2023 November 15, 2023 Interim Report 3, January – September 2023 ===== SIDA 3 ===== NIBE · INTERIM REPORT 1, 2023 3 The business area NIBE Element reported mostly strong demand, par- ticularly in product areas associated with sustainability. Pure consumer goods performed less well, however. Demand in the semiconductor in- dustry has also declined since the fourth quarter of 2022, when the USA introduced restrictions on trade with China in respect of certain high technology equipment. However, this is expected to be a temporary dip as semiconductor production capacity is now being expanded in both North America and Europe. This business area too was unabl e to escape supply chain disrup- tions, which have greatly tested the organization in terms of adaption and unconventional solutions in order to maintain a decent level of sup- ply chain security as far as possible. The assessment is that a return to a more stable supply chain situation should hopefully take place in the second half of the year. The increase in sales together with good cost control and agility and adaptability resulted in an improved operating profit, while the operat- ing margin declined slightly, primarily as a result of a change in produc- tivity. Investments Investments in our existing businesses amounted to SEK 639 million in the first quarter, compared with SEK 478 million in the previous year. Excluding leases, depreciation amounted to SEK 288 million, compared with SEK 260 million in the first quarter of 2022. In view of the expected continued good market conditions in all three business areas, together with further automation, rationalizations and sustainable development, the rate of investment in our existing businesses will remain high. In the next three to four years alone, accumulated investments are expected to amount to around SEK 10 billion, of which around half will comprise increased production capacity. Profit Operating profit in the first quarter improved by 86.5% compared with the corresponding period in the previous year and the operating margin rose from 10.8% to 15.1%. Profit after net financial items improved by 82.6% in the first quarter, while the profit margin rose to 14.2% from 10.4% in the previous year. Excluding the effect of one-off write-downs of SEK 114 million in re- spect of our Russian operations in the first quarter of 2022, the operat- ing margin in the first quarter of the previous year was 12.1% and the profit margin was 11.7%. Gerteric Lindquist Managing Director and CEO Outlook for 2023 ⋅ Our corporate philosophy and our strong range of products, with their focus on sustainability and energy efficiency, are in tune with the times because the transition to a fossil-free society is considered to be irrevocable. ⋅ We are well prepared to continue being proactive on acquisitions. ⋅ Our internal efforts to enhance efficiency, combined with our rigorous cost control, will ensure consistently healthy margins. ⋅ All three business areas have a good geographical spread, which makes us less vulnerable to local downturns in demand. ⋅ Our decentralised organisation, based on independent units, is well proven and creates the conditions for greater motivation and flexibility. ⋅ The pandemic effects are continuing to fade, which is a very significant and positive factor. ⋅ The problems relating to sub-suppliers are expected to gradually improve over the year. ⋅ The effects of the war in Ukraine, general political unrest, interest rate developments and high energy prices are factors that are difficult to predict, however. ⋅ However, as is our habit, and based on experience, we remain cautiously optimistic about our full-year performance. Markaryd, May 16, 2023 Gerteric Lindquist Managing Director and CEO ===== SIDA 4 ===== 4 NIBE · INTERIM REPORT 1, 2023 Sales The Group’s net sales totalled SEK 11,646 million (SEK 8,749 million) . This correspond to growth of 33.1%. Of the total increase in sales of SEK 2,897 million, acquired sales amounted to SEK 464 million, which means that organic sales increased by 27.8%. Profit Profit for the year after net financial items amounted to SEK 1,654 million. This corresponds to an 82.6% increase in earnings compared with 2022. In the same period in the previous year, profit after net financial items amounted to SEK 906 million. At the end of the period, net financial items amounted to SEK -101 million, an increase of SEK 66 million compared with the same period in the previous year. The increase in net financial costs was due the general inter est rate situation because the Group’s credit facilities mostly have variable interest rates. Profit for the year was weighed down by acquisition costs of SEK 30 (3) million . Return on equity, was 17.7% (15.6%). Acquisitions At the beginning of January 2023, we acquired 65% of the shares in the Canadian stove company Miles Industries Ltd, which has sales of around CAD 75 million. We have an agreement to acquire the outstanding sha- res not later than in 2026. The company was consolidated into NIBE Stoves as of January 2023. The acquisition balance sheet is still provis- ional. Investments During the year, the Group invested a total of SEK 1,341 (492) million. A total of SEK 702 (14) million of the investments related to acquisitions of operations. The remaining SEK 639 (478) million mainly comprised in- vestments in machinery and equipment and buildings in existing oper- ations. The investment amount relating to acquisitions is based on both initial considerations and an estimate of additional considerations to be paid. Cash flow and financial position Cash flow from operating activities before changes in working capital amounted to SEK 1,419 (939) million. Cash flow after changes in working capital amounted to SEK 392 (-145) million. The increase in working ca- pital was primarily due to stockbuilding ahead of peak season. Interest-bearing liabilities at the end of the period amounted to SEK 11,701 million. At the start of the year, the corresponding figure was SEK 11,357 million. At the end of March, the Gr oup had cash and cash equi- valents of SEK 4,543 million, as against SEK 5,441 million at the start of the year. The equity/assets ratio at the end of the period was 52.3%, compared with 51.8% at the start of the year and 50.3% at the corre- sponding time in the previous year. Parent Parent activities comprise Group executive management functions, certain shared Group functions and financing. Sales for the year totalled SEK 15 (16) million and profit after financial items was SEK 12 ( -29) million NIBE Group Key figures Q1 2023 Q1 2022 Past 12 months Full year 2022 Net sales SEK m 11,646 8,749 42,968 40,071 Growth % 33.1 28.1 31.2 30.0 of which acquired % 5.3 1.3 4.4 3.5 Operating profit SEK m 1,755 941 6,677 5,863 Operating margin % 15.1 10.8 15.5 14.6 Profit after net financial items SEK m 1,654 906 6,423 5,675 Profit margin % 14.2 10.4 14.9 14.2 Equity/assets ratio % 52.3 50.3 52.3 51.8 Return on equity % 17.7 15.6 19.5 18.1 Group sales by geographical region Net sales Past nine quarters (in millions of SEK) Profit after financial items Past nine quarters (in millions of SEK) ===== SIDA 5 ===== NIBE · INTERIM REPORT 1, 2023 5 Business area trends Quarterly data Consolidated income statement 2023 2022 2021 (SEK million) Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net sales 11,646 8,749 9,656 9,999 11,667 6,831 7,790 7,823 8,388 Operating expenses -9,891 -7,808 -8,087 -8,534 -9,779 -5,966 -6,568 -6,621 -7,209 Operating profit 1,755 941 1,569 1,465 1,888 865 1,222 1,202 1,179 Net financial items -101 -35 -22 -14 -117 -32 -51 -31 -36 Profit after net financial items 1,654 906 1,547 1,451 1,771 833 1,171 1,171 1,143 Tax -380 -226 -310 -343 -401 -188 -259 -260 -233 Net profit 1,274 680 1,237 1,108 1,370 645 912 911 910 Net sales, business areas NIBE Climate Solutions 7,736 5,583 6,367 6,344 7,782 4,310 5,199 5,142 5,476 NIBE Element 3,013 2,474 2,672 2,842 2,937 2,001 2,082 2,125 2,214 NIBE Stoves 1,250 900 830 1,042 1,239 705 696 746 904 Elimination of Group transactions -353 -208 -213 -229 -291 -185 -187 -190 -206 Group total 11,646 8,749 9,656 9,999 11,667 6,831 7,790 7,823 8,388 Operating profit, business areas NIBE Climate Solutions 1,353 612 1,204 1,022 1,500 579 900 907 852 NIBE Element 280 250 299 325 249 216 223 213 224 NIBE Stoves 165 103 95 137 216 85 82 103 143 Elimination of Group transactions -43 -24 -29 -19 -77 -15 17 -21 -40 Group total 1,755 941 1,569 1,465 1,888 865 1,222 1,202 1,179 Sales per business area, last nine quarters (SEK million) Each business area’s share of total sales (Q1, 2023) Operating profit per business area, last nine quarters (SEK million) Each business area’s share of total profit (Q1, 2023) ===== SIDA 6 ===== 6 NIBE · INTERIM REPORT 1, 2023 Market We see continued significant interest among end -consumers in both saving energy and finding fossil-free alternatives to natural gas and oil. This is driving the transition to a society that is less dependent on fossil fuels. We have long been convinced that heat pump technology is the best solution for energy-efficient and environmentally-friendly climate control of both small and large properties. Now the International Energy Agency (IEA) has confirmed this in a report stating that heat pumps are the best option for reduced climate impact. Heat pumps are now rapidly becoming established as the solution to re- ducing energy consumption related to climate control of properties and to reducing emissions of carbon dioxide throughout Europe. We are therefore continuing to see very strong demand for all our heat pump solutions. The North American market has also been influenced by the development in Europe, and this is boosting demand for alternatives to current climate con- trol products, which are primarily based on fossil fuels. Although we have sharply increased our production capacity, our delivery capability continues to be adversely affected by external cir- cumstances such as shortages of a number of critical components. The majority of our sub -suppliers have seen a substantial improvement in delivery capability, however. To solve the climate change issue, in which climate control of prop- erties is a major factor, and speed up the transition to a more sustaina- ble society, the clear objective in a growing number of countries is that products that use fossil fuels such as oil and gas should be phased out in the long term, which is something that benefits our sector both in the short and long term. All our targeted markets in Europe continue to show very good growth. In the Netherlands, which has made a lot of progress in the transition to fossil-free fuels, the market development for heat pumps remains strong. The German market, which is important to us, is also showing very strong growth. This is an effect both of fa vourable state subsidies offered to encourage the replacement of existing oil and gas boilers with energy-efficient and environmentally-friendly heat pumps, and the urgent need to become less dependent on Russian oil and gas. All the Nordic markets are also growing, which benefits us as the market leader in all the Nordic countries. All our units in Eastern Europe are also reporting strong expan- sion. Several of these markets, where we are well represented both through our own production of water heaters and sales of heat pumps, are growing very rapidly as result of efforts to reduce de- pendence on coal, gas and oil. The rate of growth in the Swedish domestic market for heat pumps increased slightly in the first quarter thanks to supply chain capacity in the industry as regards heat pumps having improved. Underlying de- mand remains strong in the replacement products market, while new production of single -family houses has slowed down markedly. Our market position in both segments remains strong, which means we are well placed to adapt to changes in the market Operations We have remained fully focused on securing access to raw materials and components while also increasing capacity in our production units, which has resulted in significantly improved delivery capability. We have also seen a positive change in North America, where low unemployment has been a challenge when it comes to finding and retaining workers. During the first few months of the year we carried out major mar- keting initiatives. In February, we attended one of the world’s biggest international trade fairs, AHR Expo in Atlanta, USA. In March, we partic- ipated in the international trade fair ISH in Frankfurt in Germany, where heat pumps and the R290 refrigerant were a recurring theme, really re- inforcing the commitment to the ongoing transition to environmentally- friendly and fossil -free climate control. Our participation boosts our profile as a market leader in energy-efficient, environmentally sustain- able and intelligent product soluti ons for indoor comfort based on re- newable energy. Demand is expected to continue to show strong growth and to meet this we are carrying out large investments in capacity at several of our European operations. At NIBE in Markaryd an additional new production line for air/water heat pumps has come on stream, doubling our pro- duction capacity in this rapidly growing segment in Europe. In Germany, AIT has built a new heat pump plant to meet demand for heat pump production capacity. Alongside this, we are also expanding our capacity for production of pressure vessels, which are an important component in heat pump installations. We are continuously focusing major resources on product develop- ment and the introduction of high-performance products in all applica- tion areas. This is one of the basic requirements for continued expan- sion. We have already launched the natural refrigerant R290 for two of our three heat pump product families and are ahead of EU requirements in this respect. Our brand new innovation center in Markaryd has partially come on stream, with more operations moving in gradually during the spring. The center will enable us to safeguard the quality of our future product de- velopment and attract new development engineers. Operating profit improved shar ply as result of volume growth and improved materials supply, together with a continued cautious ap- proach to fixed costs. Exchange rates also had a positive impact, while our own price increases have now taken almost full effect. In total, this means the operating margin improved significantly. Business area NIBE Climate Solutions Key figures Q1 2023 Q1 2022 Past 12 months Full year 2022 Net sales SEK m 7,736 5,583 28,228 26,076 Growth % 38.6 29.5 31.9 29.6 of which acquired % 3.5 1.2 4.2 3.7 Operating profit SEK m 1,353 612 5,079 4,338 Operating margin % 17.5 11.0 18.0 16.6 Assets SEK m 34,535 29,484 34,535 33,813 Liabilities SEK m 6,543 4,933 6,543 6,504 Investments in non-current assets SEK m 453 320 1,569 1,436 Amortisation/Depreciation SEK m 229 210 893 875 Sales and profit Sales for the period totalled SEK 7,736 million, com- pared with SEK 5,583 million in the corresponding pe- riod in the previous year. Of the increase in sales of SEK 2,153 million, acquired sales accounted for SEK 197 million, which means that organic growth was 35.1%. Operating profit for the period totalled SEK 1,353 million, compared with SEK 612 million in the previous year. This equates to an operating margin of 17.5% compared with 11.0% for the previous year. The oper- ating margin for the past 12 months is thus 18.0%. ===== SIDA 7 ===== NIBE · INTERIM REPORT 1, 2023 7 Large presence at international ISH fair After four years, the large international trade fair ISH in Frankfurt returned in March. This time, the focus of the entire event was the ongoing transition in Europe to a fossil-free society and climate control of properties, with particular focus on heat pumps and natural refrigerants. NIBE Climate Solutions was well represented, with our companies showcasing energy-efficient and environ- mentally friendly climate control solutions across a total of 1,300 square metres of exhibition space. We were also able to r eport that NIBE started using R290 propane, the refrigerant everyone was talking about, as far back as 1997. NIBE AB CTC Rhoss Argoclima AIT Waterkotte TIKI DZD ===== SIDA 8 ===== 8 NIBE · INTERIM REPORT 1, 2023 Market The unprecedented growth in demand for wood-fired stove products in Europe continued in the first quarter of the year. Although energy prices have returned to more normal levels, the unsettled external environ- ment has been a strong driver behind the trend to invest in an auxiliary heat source to secure heat supply ahead of next winter too. Underlying demand in Scandinavia remained very strong, but the continued supply chain challenges throughout the industry resulted in deliveries of products to customers not reaching the expected level, although we were able to increase our production volumes. While there is significant interest in investing in a stove product, new production of single family houses is falling, which is having the opposite effect on demand. In Germany, one of the markets reporting the largest growth in 2022, demand remains strong. It is clear that the dependence on gas needs to be reduced, which means interest in alternative heat sources is grow- ing. Demand is also driven by government requirements under which use of older fireplaces that do not meet applicable Ecodesign require- ments will not be permissible in future. In the UK too, demand for wood-fired products remains strong, with the high energy costs in 2022 providing an incentive to invest in mod- ern, more efficient stoves. Demand for gas-fired and electric stoves was weaker. In the same way, rising pellets prices in France resulted in de- mand for pellets -fired stoves falling, at the same time as demand for wood-fired products rose sharply. In North America, demand for gas -fired products has declined and the total market is now back to the more normal levels seen before the- pandemic. Demand for wood-fired products remains good as these are a reliable auxiliary heat source in case of malfunction of the ordinary heating system in the home. Operations Extremely high inflow of orders for wood-fired products in the past few years has resulted in unusually large backlogs of orders throughout the industry, which in turn has resulted in long delivery times for new or- ders. We are working very hard to further increase vol umes at our pro- duction plants but the continued shortage of key components from a small number of sub -suppliers is making it difficult to meet customer demand in the short term. We expect to see a gradual improvement over the year, however. In North America, production capacity for gas -fired products has been adjusted to match prevailing market conditions. The first large trade fair for stove products took place in April. It was held in Germany and was very well received by visitors. Several of our brands were represented at the fair to meet customers in person and launch new products. Contura, our Swedish brand, presented its brand new future concept, Contura Zero. This concept means that products can have built-in cleaning equipment that significantly reduces particle emissions without adversely impacting the design and flame visibility of the products. Shortly after the turn of the year, we acquired 65% of the shares in Miles Industries of Canada, a family -owned company whose products are sold under the well-known Valor brand. The company has built up a strong network of retailers in both Canada and the USA over several decades, resulting in a very strong and well-established market position in North America. In total, we now have a very strong platform in North America for continued profitable growth. Both our operating profit and operating margin increased in the first quarter of the year as a result to higher sales volumes together with essential price increases, favorable exchange rates and a continued cautious approach to fixed costs. Business area NIBE Stoves Key figures Q1 2023 Q1 2022 Past 12 months Full year 2022 Net sales SEK m 1,250 900 4,362 4,011 Growth % 39.0 27.6 34.4 31.5 of which acquired % 21.5 0.0 11.1 5.4 Operating profit SEK m 165 103 613 551 Operating margin % 13.2 11.5 14.1 13.7 Assets SEK m 6,143 4,087 6,143 5,000 Liabilities SEK m 1,158 661 1,158 1,042 Investments in non-current assets SEK m 53 16 160 123 Amortisation/Depreciation SEK m 44 32 162 150 Sales and profit Sales for the period totalled SEK 1,250 million, com- pared with SEK 900 million for the corresponding pe- riod last year. Of the increase in sales of SEK 350 mil- lion, acquired sales accounted for SEK 193 million, which means that organic growth was 17.5%. Operating profit for the period totalled SEK 165 million, compared with SEK 103 million in the previous year. This equates to an operating margin of 13.2% compared with 11.5% for the previous year. This means that the operating margin for the past 12 months is 14.1%. In April, CONTURA participated in the new trade fair – WORLD OF FIREPLACES - in Leipzig in Germany, which attracted more than 200 exhibitors from our indus- try. Contura, which represents a completely new trade fair concept, launched a brand new product concept focusing on technology of the future. The trade fair was well attended and there was a wonderful atmosphere in and around Contura’s stand. ===== SIDA 9 ===== NIBE · INTERIM REPORT 1, 2023 9 Market Demand in the majority of the business area’s market segments re- mained strong in the first quarter of the year. However, both demand and deliveries were still affected by the various disruptions in interna- tional supply chains. Although this situation has improved compared with the previous year, it still has a significant impact on us and requires significant flexibility and preparedness, as well as gradual adaptation of operations. Besides the generally strong demand, we saw a strong increase in several of our market segments, particularly products linked to sustain- ability, renewable energy and energy -efficient solutions for climate control, such as heat pumps. This applies both to products for private and commercial use. The ambition to reduce greenhouse gas emissions also means that the number of industrial projects based on electric heating is growing steadily. Demand for various kinds of energy storage solutions is also growing. The majority of these solutions involve some form of electric heating and control. Demand for produ cts for the wind power industry declined as a result of a significant drop in the number of projects in 2023, largely due to delays in permitting processes. However, the assessment is that this market will improve significantly next year. Demand for produ cts in the consumer segment, such as domestic appliances and direct electric heating, declined compared with the pre- vious year. This was due to a combination of lower consumer demand and inventory adjustments by our customers. The market for commer- cial products, for example catering equipment and commercial coffee machines, also reported continued strong demand. Electrification of vehicles means new business opportunities for us, both with regard to passenger cars and commercial vehicles. Demand in the semiconductor industry has fallen since the USA in- troduced trade restrictions in respect of exports of advanced technol- ogy to China at the end of 2022, as the same time as demand in certain product segments declined. Demand is expected to pick up in the long term, however, a trend that will be further strengthened by future in- vestments in expansion of the semiconductor industry in both North America and Europe, in order to reduce dependence on Asia in this im- portant technology area. Operations To meet increased demand, we have continued to increase production capacity at our units both through recruitment and investments in ca- pacity in the segments reporting strong organic growth. At the same time, we are reducing production capacity in segments with falling de- mand. In parallel with this, we have implemented additional investments in robotics and automation as well as productivity improvement measures in order to maintain competitiveness and keep the operating margin at the target level of 10%. Sharp increases in the price of materials, services and energy, as well as rising freight costs, have also forced us to introduce successive price rises of our own to compensate for this development. Overall, our customers have been understanding and have accepted these price ad- justments. Exchange rates remain volatile, with a considerable effect on pricing and competitiveness. In this situation, our international presence with production units in different currency zones gives us a clear advantage. In general, there are labor shortages in many of the countries where we have production units. Despite falling demand in certain key product segments, overall growth has been strong and we have been able to increase our operat- ing profit, thanks to good control of fixed costs and rapid adjustment of each business area to the prevailing demand and delivery situation. Business area NIBE Element Key figures Q1 2023 Q1 2022 Past 12 months Full year 2022 Net sales SEK m 3,013 2,474 11,464 10,925 Growth % 21.8 23.7 28.9 29.7 of which acquired % 3.0 1.7 2.2 1.9 Operating profit SEK m 280 250 1,153 1,123 Operating margin % 9.3 10.1 10.1 10.3 Assets SEK m 14,419 11,764 14,419 14,100 Liabilities SEK m 2,485 2,085 2,485 2,276 Investments in non-current assets SEK m 131 143 597 609 Amortisation/Depreciation SEK m 118 103 474 459 Sales and profit Sales for the period totalled SEK 3,013 million, com- pared with SEK 2,474 million in the corresponding period in the previous year. Of the increase in sales of SEK 539 million, acquired sales accounted for SEK 73 million, which means that organic sales in- creased by 18.8%. Operating profit for the period totalled SEK 280 million, compared with SEK 250 million in the previ- ous year. This equates to an operating margin of 9.3% compared with 10.1% for the previous year. This means that the operating margin for t he past 12 months is 10.1%. We are seeing strong interest in electric heat solutions for industrial pro- cesses. The demand is due to businesses wishing to make the transition from fossil fuels to electric heating in order to reduce their CO2 emissions. The heat solution shown above is a customized product by our Danish company JEVI for drying of raw materials within the food industry. ===== SIDA 10 ===== 10 NIBE · INTERIM REPORT 1, 2023 Condensed income statement Group Parent (SEK million) Jan-Mar 2023 Jan-Mar 2022 Past 12 months Full year 2022 Jan-Mar 2023 Jan-Mar 2022 Net sales 11,646 8,749 42,968 40,071 15 16 Cost of goods sold -7,748 -6,173 -29,037 -27,462 0 0 Gross profit 3,898 2,576 13,931 12,609 15 16 Selling expenses -1,505 -1,165 -5,261 -4,921 0 0 Administrative expenses -777 -594 -2,831 -2,648 -62 -35 Other operating income 139 124 838 823 0 0 Operating profit 1,755 941 6,677 5,863 -47 -19 Net financial items -101 -35 -254 -188 59 -10 Profit after net financial items 1,654 906 6,423 5,675 12 -29 Tax -380 -226 -1,434 -1,280 0 0 Net profit 1,274 680 4,989 4,395 12 -29 Net profit attributable to Parent shareholders 1,270 662 4,959 4,351 12 -29 Net profit attributable to non- controlling interest 4 18 30 44 0 0 Net profit 1,274 680 4,989 4,395 12 -29 Includes amortisation/depreciation according to plan as follows 391 345 1,530 1,484 0 0 Net profit per share before and after dilution, SEK 0.63 0.33 2.46 2.16 0 0 Statement of comprehensive income Net profit 1,274 680 4,989 4,395 12 -29 Other comprehensive income Items that will not be reclassified to profit or loss Actuarial gains and losses in retirement benefit plans 0 0 160 160 0 0 Tax 0 0 -34 -34 0 0 0 0 126 126 0 0 Items that may be reclassified to profit or loss Cash flow hedges -1 18 -19 0 0 0 Hedging of net investments -21 -5 -107 -91 0 0 Exchange differences on translation of foreign operations 92 436 2,779 3,123 0 0 Tax 18 -32 -122 -172 0 0 88 417 2,531 2,860 0 0 Total other comprehensive income 88 417 2,657 2,986 0 0 Total comprehensive income 1,362 1,097 7,646 7,381 12 -29 Comprehensive income attributable to Parent shareholders 1,358 1,076 7,601 7,319 12 -29 Comprehensive income attributable to non-controlling interest 4 21 45 62 0 0 Total comprehensive income 1,362 1,097 7,646 7,381 12 -29 ===== SIDA 11 ===== NIBE · INTERIM REPORT 1, 2023 11 Condensed balance sheet Group Parent (SEK million) 31 Mar 2023 31 Mar 2022 31 Dec 2022 31 Mar 2023 31 Mar 2022 31 Dec 2022 Intangible assets 23,082 20,696 22,568 0 0 0 Property, plant and equipment 9,002 6,422 8,273 0 0 0 Financial assets 1,051 642 1,001 18,420 16,534 18,162 Total non-current assets 33,135 27,760 31,842 18,420 16,534 18,162 Inventories 11,334 7,435 10,191 0 0 0 Current receivables 7,546 5,886 7,144 120 96 379 Investments in securities, etc 191 164 190 0 0 0 Cash and bank balances 3,854 4,036 4,627 0 102 0 Total currents assets 22,925 17,521 22,152 120 198 379 Total assets 56,060 45,281 53,994 18,540 16,732 18,541 Equity 29,335 22,754 27,973 9,839 9,047 9,827 Non-current liabilities, non-interest bearing 6,201 5,307 5,869 1,520 547 1,500 Non-current liabilities, interest bearing 7,091 7,662 6,399 4,251 5,500 4,250 Current liabilities, non-interest bearing 8,823 6,701 8,795 80 38 114 Current liabilities, interest bearing 4,610 2,857 4,958 2,850 1,600 2,850 Total equity and liabilities 56,060 45,281 53,994 18,540 16,732 18,541 Key figures Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Growth % 33.1 28.1 30.0 Operating profit SEK m 1,755 941 5,863 Operating margin % 15.1 10.8 14.6 Profit margin % 14.2 10.4 14.2 Investments in non-current assets, including acquisitions SEK m 1,341 492 3,745 Available cash and equivalents SEK m 4,543 4,624 5,441 Working capital incl. cash and bank balances SEK m 14,102 10,820 13,357 as share of net sales % 32.8 33.0 33.3 Working capital excl. cash and bank balances SEK m 10,057 6,620 8,540 as share of net sales % 23.4 20.2 21.3 Interest-bearing liabilities/Equity % 39.9 46.2 40.6 Equity/assets ratio % 52.3 50.3 51.8 Return on capital employed % 17.7 14.2 17.7 Return on equity % 17.7 15.6 18.1 Net debt/EBITDA times 0.9 1.1 0.9 Interest coverage ratio times 10.9 11.7 10.1 Data per share Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Net earnings per share (total 2,016,066,488 shares) SEK 0.63 0.33 2.16 Equity per share SEK 14.53 11.17 13.86 Closing day share price SEK 117.80 105.05 97.10 ===== SIDA 12 ===== 12 NIBE · INTERIM REPORT 1, 2023 Sales by geographical region (SEK million) NIBE Climate Solutions NIBE Element NIBE Stoves Eliminations Total Nordic region 2,074 517 276 -228 2,639 Europe (excl. Nordic region) 3,828 1,129 589 -119 5,427 North America 1,665 1,088 357 -6 3,104 Other countries 169 279 28 0 476 Total 7,736 3,013 1,250 -353 11,646 Time of accounting for sales (SEK million) NIBE Climate Solutions NIBE Element NIBE Stoves Eliminations Total Deliverables taken up as revenue once 7,573 3,013 1,250 -353 11,483 Deliverables taken up as revenue gradually 163 0 0 0 163 Total 7,736 3,013 1,250 -353 11,646 SERVICE CONTRACTS For certain products in Climate Solutions, NIBE offers customers the opportunity to sign one-year service contracts, under which NIBE undertakes to perform maintenance service and remedy certain defects that are not covered by the warranty provided. The sc ope of defects cannot be reliably predicted, so pricing is based on experience. Payment is received from customers annually in advance, so deferred income will be taken up as revenue gradually over the coming 12- month period. EXTENDED WARRANTY PERIOD CONTRACTS For certain products in Climate Solutions, NIBE offers customers the opportunity to sign contracts for warranty periods that exceed those provided as standard. Standard warranty periods depend both on the type of product and the market in question. The longest contracts expire within six years. The scope of defects cannot be reliably predicted, so pricing is based on experience. Payment is received from customers on delivery of goods. Deferred income will be taken up up as revenue gradually over the coming six-year period. Financial instrument measured at fair value (SEK million) 31 Mar 2023 31 Mar 2022 31 Dec 2022 Current receivables Currency futures 3 13 10 Commodity futures 0 7 3 Total 3 20 13 Current liabilities and provisions, non-interest bearing Currency futures 0 0 11 Commodity futures 2 0 0 Total 2 0 11 No instruments have been offset in the statement of financial position, so all instruments are recognised at their gross value. For a detailed account of the measurement process, see Note 29 in the Annual Report for 2022. For other consolidated financial assets and liabilities, the carrying amounts represen t a reasonable approximation of their fair value. A specification of the financial assets and liabilities involved is given in Note 29 in the Annual Report for 2022. Condensed cash flow statement (SEK million) Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Cash flow from operating activities 1,419 939 5,800 Change in working capital -1,027 -1,084 -3,186 Investing activities -1,066 -492 -2,778 Financing activities -105 34 -151 Exchange difference in cash and equivalents 7 57 386 Change in cash and equivalents -772 -546 71 Change in equity – summaries (SEK million) Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Opening equity 27,973 21,657 21,657 Effect of applying IAS29* 0 0 186 Adjusted opening equity 27,973 21,657 21,843 Shareholders’ dividend 0 0 -1,008 Dividend to non-controlling interest 0 0 -1 Change in non-controlling interest 0 0 -242 Comprehensive income for the period 1,362 1,097 7,381 Closing equity 29,335 22,754 27,973 *IAS 29 has been implemented - for more information , see Accounting policies. ===== SIDA 13 ===== NIBE · INTERIM REPORT 1, 2023 13 Alternative performance measures Alternative performance measures are financial measures that are used by the company’s management and by investors to evaluate the Group’s profit and financial position using calcula- tions that cannot be directly derived from the financial state- ments. The alternative performance measures provided in this report may be calculated using methods that differ from those used to produce similar measures that are used by other com- panies. Net investments in non-current assets (SEK million) Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Acquisition of non-current assets 1,350 498 3,767 Disposal of non-current assets -9 -6 -22 Net investments in non- current assets, including acquisitions 1,341 492 3,745 Available cash and cash equivalents (SEK million) Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Cash and bank balances 3,854 4,036 4,627 Investments in securities, etc. 191 164 190 Unutilised overdraft facilities 498 424 624 Available cash and cash equivalents 4,543 4,624 5,441 Working capital, including cash and bank balances (SEK million) Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Total current assets 22,925 17,521 22,152 Current liablities and provi- sions, non-interest bearing -8,823 -6,701 -8,795 Working capital, including cash and bank balances 14,102 10,820 13,357 Net sales, past 12 months 42,968 32,750 40,071 Working capital, including cash and bank balances, in relation to net sales, % 32.8 33.0 33.3 Working capital, excluding cash and bank balances (SEK million) Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Inventories 11,334 7,435 10,191 Current receivables 7,546 5,886 7,144 Current liablities and provisions, non-interest bearing -8,823 -6,701 -8,795 Working capital, excluding cash and bank balances 10,057 6,620 8,540 Net sales, past 12 months 42,968 32,750 40,071 Working capital, excluding cash and bank balances, in relation to net sales, % 23.4 20.2 21.3 Return on capital employed (SEK million) Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Profit after net financial items, past 12 months 6,423 4,391 5,675 Financial expenses, past 12 months 708 238 626 Profit before financial expenses 7,131 4,629 6,301 Capital employed at start of period 39,330 31,977 31,977 Capital employed at end of period 41,037 33,273 39,330 Average capital employed 40,184 32,625 35,654 Return on capital employed, % 17.7 14.2 17.7 Return on equity (SEK million) Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Profit after net financial items, past 12 months 6,423 4,391 5,675 Standard tax rate, % 20.6 20.6 20.6 Profit after net financial items, after tax 5,100 3,486 4,506 Of which attributable to Parent shareholders 5,070 3,421 4,462 Equity at start of period 27,935 21,438 21,438 Equity at end of period 29,293 22,514 27,935 Average equity 28,614 21,976 24,687 Return on equity, % 17.7 15.6 18.1 ===== SIDA 14 ===== 14 NIBE · INTERIM REPORT 1, 2023 Net debt/EBITDA (SEK million) Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Non-current liabilities and provisions, interest bearing 7,091 7,662 6,399 Current liabilities and provisions, interest bearing 4,610 2,857 4,958 Cash and bank balances -3,854 -4,036 -4,627 Investments in securities, etc. -191 -164 -190 Net debt 7,656 6,319 6,540 Operating profit, past 12 months 6,677 4,544 5,863 Depreciation/amortisation and impairment, past 12 months 1,561 1,427 1,597 EBITDA 8,238 5,971 7,460 Net debt/EBITDA excluding revaluation of additional considerations, multiple 0.9 1.1 0.9 Interest coverage ratio (SEK million) Jan-Mar 2023 Jan-Mar 2022 Full year 2022 Profit after net financial items 1,654 906 5,675 Financial expenses 167 85 626 Profit before financial expenses 1,821 991 6,301 Interest coverage ratio, multiple 10.9 11.7 10.1 The information in this report has not been reviewed by the company’s auditors. For further information on definitions, please refer to the company’s Annual Report for 2022. The interim report provides a fair review of the business, financial position and results of the Parent and the Group and describes the principal risks and uncertainties facing the Parent and companies in the Group. Markaryd, Sweden, May 16, 2023 Hans Linnarson Chairman of the Board Georg Brunstam Director Eva Karlsson Director Jenny Larsson Director Gerteric Lindquist Managing Director and CEO Anders Pålsson Director Eva Thunholm Director Accounting policies Risks and uncertainties NIBE Industrier’s consolidated accounts are prepared in accordance with International Financial Reporting Standards (IFRS). NIBE Industrier’s interim report for the first quarter of 2023 has been prepared in accordance with IAS 34 Interim Financial Reporting Disclo- sures in accordance with IAS 34 16A are presented in the financial statements and related notes as well as in other parts of the interim report. For the Group, the accounting policies applied in this report are the same as those de- scribed on pages 100–139 of the Annual Report for 2022. The Group started to apply IAS 29 Financial Reporting in Hyperinflationary Economies in 2022 as a result of its operations in Turkey. Application had an effect on opening balance equity in 2022 as comparative figures are not restated. Reporting for the Parent follows the Swedish Annual Accounts Act and the Swedish Financial Accounting Standards Board’s recommendation RFR 2 Reporting for Legal Enti- ties. Related party transactions have taken place to the same extent as in the previous year and the same accounting policies have been applied as those described on page 101 of the company’s Annual Report for 2022. NIBE Industrier is an international industrial group that is represented in around 40 countries. As such, it is exposed to several business and financial risks. Risk manage- ment is, therefore, an important process rel- ative to the goals that the company has set up. Throughout the NIBE Group, efficient risk management routines are an ongoing process within the framework of the Group’s operational management and a natural part of the continual follow -up of activities. It is our opinion that no significant risks or un- certainties have arisen in addition to those described in NIBE Industrier’s Annual Report for 2022. ===== SIDA 15 ===== NIBE · INTERIM REPORT 1, 2023 15 Number of shares traded per trading day in thousands NIBE Industrier AB is obliged by Swedish law (the Securities Market Act and/or the Financial Instruments Trading Act) to publish the informat ion in this interim report. This information was made available to the media for publication at 08.00 (CEST) on May 16, 2023. Please email any questions to: Gerteric Lindquist, MD and Group CEO, gerteric.lindquist@nibe.se Hans Backman, CFO, hans.backman@nibe.se NIBE shares NIBE’s class B shares are listed on the NASDAQ Nordic Large Cap list in Stockholm, with a secondary listing on the SIX Swiss Exchange in Zurich. The NIBE share’s closing price on March 31, 2023 was SEK 117.80. During the first three months of 2023, NIBE’s share price rose by 21.3%, from SEK 97.10 to SEK 117.80. In the same period, the OMX Stockholm PI (OMXSPI) increased by 7.8%. At the end of March 2023, the market capitalization of NIBE, based on the latest price paid, amounted to SEK 237,493 million. A total of 199,344,086 NIBE shares were traded, which corresponds to a share turn- over of 39.5% in the first quarter of 2023. All figures were restated following the 4:1 splits implemented in 2003, 2006, 2016 and May 2021, and the dilution effect of the preferential rights issue in October 2016. ===== SIDA 16 ===== NIBE Group – an international Group with companies and a presence worldwide NIBE Group is an international organization that contributes to a lower carbon footprint and better utilization of energy. In our three business areas – Climate Solutions, Element and Stoves – we develop, manufacture and market a wide range of environmentally- friendly, energy-efficient solutions for indoor climate comfort in all types of properties, plus components and solutions for intelligent heating and control in industry and infra- structure. Since its beginnings in the town of Markaryd in the province of Småland 70 years ago, NIBE has grown into an international company with an average of 21,300 (20,400) em- ployees and an international presence. From the very start, the company has been driven by a strong culture of entrepreneurship and a passion for corporate responsibility. It’s success factors are long-term investments in sustainable product development and strategic acquisitions. Combined, these factors have brought about strong, targeted growth, which generated sales of just over SEK 40 billion (SEK 30 billion) in 2022. NIBE has been listed under the name NIBE Industrier AB on the Nasdaq Nordic Large Cap list since 1997, with a secondary listing on the SIX Swiss Exchange since 2011. NIBE Industrier AB (publ) Box 14, 285 21 MARKARYD Tel +46 433-27 30 00 www.nibe.com Corporate ID no.: 55 63 74 – 8309 ===== SIDA 17 =====